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Briscoe first-half profit lifts to $27m

NZ Newswire 3/08/2016Paul McBeth

Briscoe Group, which operates stores selling household items and sports goods, says first-half profit rose at least 32 per cent as the retailer widened gross margins on more rigorous promotions and inventory management at the same time as lifting sales.

Net profit was at least $27 million in the six months ended July 31, up from $20.5 million a year earlier, the Auckland-based company said in a statement. Second-quarter sales rose 9 per cent to $135.4 million, led by a 14 per cent gain in sporting goods revenue and a 6.6 per cent increase in its homeware sales division. The pick-up in sales was boosted by new stores, and sales were up 6.5 per cent on a same-store basis. That followed on from an 11 per cent lift in first-quarter sales.

"Our bottom line is tracking well ahead of last year despite the high levels of competitiveness across the retailing sectors in which we operate," managing director Rod Duke said.

"We are very pleased with the gross margin percentage performance achieved for this half, however we are conscious that hedging of foreign exchange exposures at less-favourable rates than last year will continue to flow through to the cost of imported product."

In March, Duke said he was cautiously optimistic about the current financial year in what he described as a challenging retail environment, and government data on Wednesday showed retail trade was one sector showing accelerating wage inflation after the government hiked the minimum wage, effective from April.

Duke said the weaker currency will put more pressure on gross margins in the second half of the year, which is also a week shorter than in the previous financial year.

The shares rose 5.2 per cent to $3.44, having climbed 14 per cent so far this year, tracking a similar gain on the S&P/NZX All Index.